I understand the basic rules concerning multi accounts; and see that on a regular basis that they can be banned for a number of reasons. There is someone else that shares the same internet connection as I do and they want to sign up but I am worried it will get me banned. What is the proper way for signing up an account on the same IP?

I have refused to let my friend sign up due to this but feel guilty that I am denying them the experience and joy this game brings to me. I just want this to be legal so that I don't get banned.

It is not necessary to add your own handle to the multi field on the join form; only the other player[s] you are sharing a connection with. It is also unnecessary, and even troublesome, to send an email to register a new account as a multi. Only mail in case of problems--for instance, if the account gets accepted but you don't appear as multis on the Account Settings page.